Invest in new categories — Family Dollar is rolling out tobacco products to around 5,000 of its stores nationwide. Beer is being tested as well, along with additional impulse items at the register.

Expand product assortment — In the next couple months, Family Dollar is adding a variety of Pepsi products. The Pepsi brand matches well with the retailer's core customer base, and the move will likely grab some share from grocers.

Renovate its stores — 1,300 Family Dollar stores have already been renovated to a new and improved format, featuring a new façade, signage and higher capacity. It plans to have 1,500 more stores remodeled by the end of the year.